2nd of May 2022, Crypto.com announced in an email that they are killing their famous crypto card cro staking program (see this video: https://youtu.be/M1X9SZxTZok)
Of course there was very vocal hoo-ha and complaints.
There were many large amount sell orders too, in the millions of CRO coin being sold. Personally, as a mixed income investor and growth investor, CRO was up my alley because it provided me with income
- 12% from Earn and
- 12% from Stake
When the Earn program was knee capped by adding the tiering in (basically anything above USD 30K, the earn is pittance) – I knew their earn program days were over.
So I felt it was still okay that I could still lean on 12% from CRO card staking.
But when they announced overnight (literally the night before, as I got the email on 2nd May but the effects started 1st May), it was brutal and sincerely, fucking unprofessionally annoying.
I considered, and since I couldn’t get income from CRO, I think my CRO bag is too much, so I decided to
- unstake my Icy White tier CRO amounts
- sell those CRO amounts for both top ten crypto as well as to fiat (withdraw to my bank account)
I still have a good chunk of CRO staked in the exchange, but I’ll think about what to do with it later when the staking is finished.
Is CDC out of money?
Some of the hearsay (lol, in a nod to Depp vs Heard case) is that Crypto.com is outta money because they spent too much in adspend (advertising spend).
It’s unlikely they are out of money. This year itself, in January, they set aside USD 500 million to invest in early stage crypto start ups (ie crypto venture capitalism), paid out of their balance sheet (ie cash from business operations). They have cash.
So….if they weren’t outta cash, then why?
A few reasons in my speculated theories (hey, I’m no insider, but I can estimate why)
- It was in their plan all along to reduce such non-revenue-generating expenses. Paying out in crypto earn and cro staking doesn’t generate revenue for them at all. It was good and sexy to attract clients and users* (the keyword here is USERS. They want users who use their platforms and trade, so that it generates revenue).
- Secondly, they burned 80% of CRO so it’s possible that they need to create a buy-back event AS well as shake out passive, non-active non-revenue generating hodlers.
- This isnt their first time reducing earn or stake rewards since they started operations.
What should you do?
Dr Crypto Finance said this in this article: https://drcryptofinance.substack.com/p/crypto-dot-com-cdc-cro-crypto-crisis?
- Don’t Sell Your CRO Right Now —> CDC is changing its fundamentals. This doesn’t mean it has lost its fundamentals. I, personally, believe it will succeed in its rebrand and will give Binance, BSC, and BNB a run for their money. Don’t sell for a loss now when you can sell for a profit 2 years from now (inflation-adjusted…)
- Don’t Buy Anymore CRO Right Now —> market conditions are currently very volatile and I, honestly, have no idea where the price of CRO will settle. I believe CRO will not fall below 0.20 USD/CRO but I also might be wrong if CDC takes actions to move the price further down. At the end of the day, I think you have 2 years of bear market instability on your side.
- Prepare To Buy More CRO In The Next 6-12 Months —> if you haven’t lost faith in the company, you may consider buying more CRO but at the 0.20-0.25 USD/CRO price point. Bear in mind that your DeFi wallet will continue to offer you ~12% returns on staking your CRO through various validator nodes if you do choose to buy CRO in the next 6-12 months.
What am I going to do?
For me, as I prefer and need to have income as well as growth (capital gains), I cannot just wait for CRO price to increase. I know their price will increase gradually with their
- cronos chain
- crypto early-stage investing
But I need income to live. So for me, I liquidated a chunk to both
- fiat, which I’ve drawn out to my bank account
- top 10 non-stable coin positions
I’ll be withdrawing more crypto to fiat purchasing a rental property that has more stability.
Am I still in CRO?
I believe they can be a strong contender to Binance as they grow. I am still annoyed at the way they communicate and do things, and moving forward, I am setting my expectation that eventually there will be zero earn and stake rewards, and my returns on CRO will be purely on price action of CRO coin.
I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
Started and sold off a business for 7-figures; built another 7-figure one and growing it further, plus building/investing into other businesses and investments as well as advisory works.
Nowadays I share and teach entrepreneurship, financial independence, retiring early as well as building and living a life you love.